FORWARD AIR CORP - FORM 8-K - EX-99.1 - FORWARD AIR CORP. EXHIBIT 99.1

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8-K - FORWARD AIR CORP. FORM 8-K - FORWARD AIR CORP	form8-k.htm

NEWS RELEASE

FORWARD AIR CORPORATION REPORTS

FOURTH QUARTER AND FISCAL 2011 RESULTS AND

ANNOUNCES QUARTERLY CASH DIVIDEND

GREENEVILLE, Tenn.-(BUSINESS WIRE) - February 7, 2012-Forward Air Corporation (NASDAQ:FWRD) today reported results for the fourth quarter and year ended December 31, 2011.

Operating revenue for the quarter ended December 31, 2011 increased 11.2% to $148.2 million from $133.3 million for the same quarter in 2010. Income from operations was $23.6 million, compared with $18.7 million for the fourth quarter of 2010, an increase of 26.2%. As a percent of operating revenue, income from operations increased to 15.9% for the fourth quarter of 2011 from 14.0% in the same quarter of 2010. Net income per diluted share for the fourth quarter of 2011 was $0.50 compared with $0.41 in the same quarter of 2010, an increase of 22.0%.

Operating revenue for the year ended December 31, 2011 increased 10.8% to $536.4 million from $483.9 million for the year ended December 31, 2010. Income from operations was $77.1 million, compared with $53.7 million in 2010. The Company's net income for the year ended December 31, 2011, was $47.2 million, compared with $32.0 million in 2010. Net income per diluted share for the year ended December 31, 2011 was $1.60 compared with $1.10 in 2010.

Bruce A. Campbell, Chairman, President and CEO, said, “We are pleased to announce that a solid fourth quarter completed a record breaking performance year for 2011. Strong demand for our service offerings produced record breaking operating revenue, operating income and earnings per share. While not a record, our 85.6% operating ratio for 2011 was an impressive 330 basis points improvement over 2010.”

Commenting further, Mr. Campbell said, “With the benefit of the Forward Air business model, which continues to exhibit ample operating leverage, a solid pricing environment and current inventory and shipping trends that favor our expedited time-definite service offerings, our team is anxious to deliver even better results to our shareholders in 2012.”

In closing, Mr. Campbell said, “As always I would like to acknowledge our employees and independent contractors whose hard work and dedication were critical in producing these outstanding results.”

In commenting further on the quarter, Rodney L. Bell, Senior Vice President and CFO said, “We ended 2011 with cash on hand of $58.8 million. In anticipation of entering into a new credit facility subsequent to year end we used $50 million of our cash reserves to pay off our previous line of credit borrowings. During February 2012, we will finalize our new credit facility. The new credit facility will have a five year term with an initial borrowing capacity of $150 million. This availability to credit, along with our continued ability to generate strong cash flows, will provide flexibility as we evaluate possible acquisition and other opportunities in the new year.”

In commenting on the Company's guidance for the first quarter, Mr. Bell said, “We anticipate our first quarter 2012 revenues will increase in the range of 8% to 12% over the comparable 2011 period, and we expect income per diluted share to be between $0.31 and $0.35 per share. This compares to $0.27 per share in the first quarter of 2011.”

On February 7, 2012, our Board of Directors declared a quarterly cash dividend of $0.07 per share of common stock. The dividend is payable to shareholders of record at the close of business on March 8, 2012, and is expected to be paid on March 23, 2012.

This quarterly dividend is pursuant to a cash dividend policy approved by the Board of Directors, which anticipates a total annual dividend of $0.28 per share of common stock, payable in quarterly increments of $0.07 per share of common stock. The actual declaration of future cash dividends, and the establishment of record and payment dates, is subject to final determination by the Board of Directors each quarter after its review of the Company's financial performance.

Review of Financial Results

Forward Air will hold a conference call to discuss fourth quarter and year end 2011 results on Wednesday, February 8, 2012 at 9:00 a.m. EST. The Company's conference call will be available online at www.forwardair.com or by dialing 800-230-1085. A replay of the conference call will be available at www.forwardair.com beginning shortly after the completion of the live call.

About Forward Air Corporation

Forward Air Corporation operates two business segments, Forward Air, Inc. and Forward Air Solutions, Inc.

Forward Air, Inc. is a high-service-level contractor to the air cargo industry providing time-definite ground transportation services through a network of terminals located on or near major airports in 85 cities in the United States and Canada. It provides these services as a cost-effective alternative to air transportation of cargo that must be delivered at a specific time but is relatively less time-sensitive than traditional air freight or when air transportation is not economical.

Forward Air Solutions, Inc. is a provider of pool distribution services. Pool distribution involves the consolidation and shipment of several smaller less-than-truckload shipments to a common area or region. Once at the regional destination, the loads are deconsolidated, then grouped with other shipments with common delivery points, and delivered in a very precise, time-sensitive manner. Our pool distribution network consists of terminals and service locations in 19 cities within the Mid-Atlantic, Southeast, Midwest and Southwestern United States.



Forward Air Corporation
Consolidated Statements of Income
(In thousands, except per share data)
(Unaudited)

	Three months ended						Year ended
	December 31, 2011			December 31, 2010			December 31, 2011			December 31, 2010
Operating revenue:
Forward Air
Airport-to-airport	$	95,024		$	87,245		$	361,630		$	321,702
Logistics	21,485			17,147			74,394			64,935
Other	7,116			6,386			27,640			25,130
Forward Air Solutions
Pool distribution	24,634			22,532			72,738			72,172
Total operating revenue	148,259			133,310			536,402			483,939

Operating expenses:
Purchased transportation
Forward Air
Airport-to-airport	38,294			34,959			142,705			129,111
Logistics	16,045			13,445			56,259			50,225
Other	1,752			1,476			6,681			6,288
Forward Air Solutions
Pool distribution	6,288			5,123			17,355			15,747
Total purchased transportation	62,379			55,003			223,000			201,371
Salaries, wages and employee benefits	35,315			33,426			130,651			129,108
Operating leases	7,039			6,864			27,122			26,252
Depreciation and amortization	5,259			5,167			20,993			20,450
Insurance and claims	2,658			2,442			8,798			8,425
Fuel expense	2,683			2,409			10,041			8,461
Other operating expenses	9,297			9,321			38,687			36,133
Total operating expenses	124,630			114,632			459,292			430,200
Income from operations	23,629			18,678			77,110			53,739

Other income (expense):
Interest expense	(151		)	(173		)	(619		)	(730		)
Other, net	16			53			74			90
Total other expense	(135		)	(120		)	(545		)	(640		)
Income before income taxes	23,494			18,558			76,565			53,099
Income taxes	9,045			6,741			29,366			21,063
Net income	$	14,449		$	11,817		$	47,199		$	32,036

Net income per share:
Basic	$	0.51		$	0.41		$	1.62		$	1.11
Diluted	$	0.50		$	0.41		$	1.60		$	1.10
Weighted average shares outstanding:
Basic	28,502			29,010			29,052			28,984
Diluted	28,968			29,174			29,435			29,111

Dividends per share:	$	0.07		$	0.07		$	0.28		$	0.28



Forward Air Corporation
Consolidated Balance Sheets
(In thousands)
(Unaudited)
	December 31, 2011		December 31, 2010 (a)
Assets
Current assets:
Cash and cash equivalents	$	58,801	$	74,504
Accounts receivable, net	70,922		62,763
Other current assets	9,994		8,696
Total current assets	139,717		145,963

Property and equipment	223,135		213,704
Less accumulated depreciation and amortization	93,267		87,272
Net property and equipment	129,868		126,432
Goodwill and other acquired intangibles:
Goodwill	43,332		43,332
Other acquired intangibles, net of accumulated amortization	26,668		31,259
Total net goodwill and other acquired intangibles	70,000		74,591
Other assets	1,566		1,810
Total assets	$	341,151	$	348,796


Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable	$	12,392	$	10,687
Accrued expenses	20,986		16,280
Current portion of debt and capital lease obligations	552		638
Total current liabilities	33,930		27,605

Debt and capital lease obligations, less current portion	333		50,883
Other long-term liabilities	8,860		8,106
Deferred income taxes	11,126		6,116
Commitments and contingencies
Shareholders’ equity:
Common stock	285		290
Additional paid-in capital	16,121		24,300
Retained earnings	270,496		231,496
Total shareholders’ equity	286,902		256,086
Total liabilities and shareholders’ equity	$	341,151	$	348,796

(a) Taken from audited financial statements, which are not presented in their entirety.



Forward Air Corporation
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)

	Three months ended
	December 31, 2011			December 31, 2010
Operating activities:
Net income	$	14,449		$	11,817
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	5,259			5,167
Share-based compensation	1,514			1,397
(Gain) loss on disposal of property and equipment	(6		)	78
Provision for recovery on receivables	(234		)	(254		)
Provision for revenue adjustments	471			127
Deferred income taxes	(931		)	3,060
Tax benefit for stock options exercised	(515		)	(166		)
Changes in operating assets and liabilities
Accounts receivable	(1,585		)	(198		)
Prepaid expenses and other current assets	71			989
Accounts payable and accrued expenses	3,636			(5,883		)
Net cash provided by operating activities	22,129			16,134

Investing activities:
Proceeds from disposal of property and equipment	270			69
Purchases of property and equipment	(924		)	(3,259		)
Other	(38		)	(224		)
Net cash used in investing activities	(692		)	(3,414		)

Financing activities:
Payments of debt and capital lease obligations	(149		)	(173		)
Payments on line of credit	(50,000		)	—
Proceeds from exercise of stock options	3,225			501
Payments of cash dividends	(2,007		)	(2,033		)
Repurchase of common stock (repurchase program)	(1,807		)	—
Common stock issued under employee stock purchase plan	120			104
Tax benefit for stock options exercised	515			166
Net cash used in financing activities	(50,103		)	(1,435		)
Net (decrease) increase in cash	(28,666		)	11,285
Cash at beginning of period	87,467			63,219
Cash at end of period	$	58,801		$	74,504



Forward Air Corporation
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
	Year ended
	December 31, 2011			December 31, 2010
Operating activities:
Net income	$	47,199		$	32,036
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	20,993			20,450
Share-based compensation	5,971			6,284
Gain on disposal of property and equipment	(82		)	(570		)
Provision for recovery on receivables	(217		)	(52		)
Provision for revenue adjustments	1,951			1,589
Deferred income taxes	5,148			1,436
Tax benefit for stock options exercised	(747		)	(194		)
Changes in operating assets and liabilities
Accounts receivable	(9,893		)	(8,580		)
Prepaid expenses and other current assets	(1,757		)	(40		)
Accounts payable and accrued expenses	8,393			3,022
Income taxes	—			(1,386		)
Net cash provided by operating activities	76,959			53,995

Investing activities:
Proceeds from disposal of property and equipment	1,267			1,482
Purchases of property and equipment	(21,216		)	(15,148		)
Other	278			(224		)
Net cash used in investing activities	(19,671		)	(13,890		)

Financing activities:
Payments of debt and capital lease obligations	(637		)	(895		)
Payments on line of credit	(50,000		)	—
Proceeds from exercise of stock options	10,946			991
Payments of cash dividends	(8,194		)	(8,121		)
Repurchase of common stock (repurchase program)	(26,101		)	—
Common stock issued under employee stock purchase plan	248			195
Tax benefit for stock options exercised	747			194
Net cash used in financing activities	(72,991		)	(7,636		)
Net (decrease) increase in cash	(15,703		)	32,469
Cash at beginning of year	74,504			42,035
Cash at end of year	$	58,801		$	74,504



Forward Air Corporation
Segment Information
(In millions)
(Unaudited)

	Three months ended
	December 31, 2011			Percent of		December 31, 2010			Percent of					Percent
	December 31, 2011			Revenue		December 31, 2010			Revenue		Change			Change
Operating revenue
Forward Air	$	123.9		83.6	%	$	111.1		83.3	%	$	12.8		11.5	%
FASI	24.8			16.7		22.6			17.0		2.2			9.7
Intercompany eliminations	(0.5		)	(0.3	)	(0.4		)	(0.3	)	(0.1		)	25.0
Total	148.2			100.0		133.3			100.0		14.9			11.2

Purchased transportation
Forward Air	56.3			45.4		49.9			44.9		6.4			12.8
FASI	6.5			26.2		5.5			24.3		1.0			18.2
Intercompany eliminations	(0.4		)	80.0		(0.4		)	100.0		—			—
Total	62.4			42.1		55.0			41.3		7.4			13.5

Salaries, wages and employee benefits
Forward Air	26.2			21.1		24.9			22.4		1.3			5.2
FASI	9.1			36.7		8.5			37.6		0.6			7.1
Total	35.3			23.8		33.4			25.0		1.9			5.7

Operating leases
Forward Air	4.9			4.0		5.0			4.5		(0.1		)	(2.0	)
FASI	2.1			8.5		1.9			8.4		0.2			10.5
Total	7.0			4.7		6.9			5.2		0.1			1.4

Depreciation and amortization
Forward Air	4.2			3.4		4.2			3.8		—			—
FASI	1.1			4.4		1.0			4.4		0.1			10.0
Total	5.3			3.6		5.2			3.9		0.1			1.9

Insurance and claims
Forward Air	2.3			1.9		1.6			1.4		0.7			43.8
FASI	0.3			1.2		0.8			3.6		(0.5		)	(62.5	)
Total	2.6			1.8		2.4			1.8		0.2			8.3

Fuel expense
Forward Air	1.1			0.9		1.0			0.9		0.1			10.0
FASI	1.6			6.4		1.4			6.2		0.2			14.3
Total	2.7			1.8		2.4			1.8		0.3			12.5

Other operating expenses
Forward Air	7.7			6.2		7.6			6.9		0.1			1.3
FASI	1.7			6.9		1.7			7.5		—			—
Intercompany eliminations	(0.1		)	20.0		—			—		(0.1		)	100.0
Total	9.3			6.3		9.3			7.0		—			—

Income from operations
Forward Air	21.2			17.1		16.9			15.2		4.3			25.4
FASI	2.4			9.7		1.8			8.0		0.6			33.3
Total	$	23.6		15.9	%	$	18.7		14.0	%	$	4.9		26.2	%



Forward Air Corporation
Segment Information
(In millions)
(Unaudited)

	Year ended
	December 31, 2011			Percent of		December 31, 2010			Percent of					Percent
	December 31, 2011			Revenue		December 31, 2010			Revenue		Change			Change
Operating revenue
Forward Air	$	464.5		86.6	%	$	412.9		85.3	%	$	51.6		12.5	%
FASI	73.2			13.6		72.5			15.0		0.7			1.0
Intercompany eliminations	(1.3		)	(0.2	)	(1.5		)	(0.3	)	0.2			(13.3	)
Total	536.4			100.0		483.9			100.0		52.5			10.8

Purchased transportation
Forward Air	206.0			44.4		185.8			45.0		20.2			10.9
FASI	18.2			24.9		16.9			23.3		1.3			7.7
Intercompany eliminations	(1.2		)	92.3		(1.3		)	86.7		0.1			(7.7	)
Total	223.0			41.6		201.4			41.6		21.6			10.7

Salaries, wages and employee benefits
Forward Air	101.3			21.8		98.3			23.8		3.0			3.1
FASI	29.4			40.2		30.8			42.5		(1.4		)	(4.5	)
Total	130.7			24.4		129.1			26.7		1.6			1.2

Operating leases
Forward Air	19.7			4.2		18.6			4.5		1.1			5.9
FASI	7.4			10.1		7.7			10.6		(0.3		)	(3.9	)
Total	27.1			5.0		26.3			5.4		0.8			3.0

Depreciation and amortization
Forward Air	16.8			3.6		16.5			4.0		0.3			1.8
FASI	4.2			5.7		3.9			5.4		0.3			7.7
Total	21.0			3.9		20.4			4.2		0.6			2.9

Insurance and claims
Forward Air	7.2			1.6		6.2			1.5		1.0			16.1
FASI	1.6			2.2		2.2			3.0		(0.6		)	(27.3	)
Total	8.8			1.6		8.4			1.7		0.4			4.8

Fuel expense
Forward Air	4.4			0.9		3.8			0.9		0.6			15.8
FASI	5.6			7.6		4.7			6.5		0.9			19.1
Total	10.0			1.9		8.5			1.8		1.5			17.6

Other operating expenses
Forward Air	32.6			7.0		29.8			7.2		2.8			9.4
FASI	6.2			8.5		6.5			9.0		(0.3		)	(4.6	)
Intercompany eliminations	(0.1		)	7.7		(0.2		)	13.3		0.1			(50.0	)
Total	38.7			7.2		36.1			7.5		2.6			7.2

Income (loss) from operations
Forward Air	76.5			16.5		53.9			13.1		22.6			41.9
FASI	0.6			0.8		(0.2		)	(0.3	)	0.8			(400.0	)
Total	$	77.1		14.4	%	$	53.7		11.1	%	$	23.4		43.6	%



Forward Air Corporation
Forward Air Inc. Operating Statistics

	Three months ended
	December 31,			December 31,			Percent
	2011			2010			Change

Operating ratio	82.9		%	84.8		%	(2.2	)%

Business days	63.0			63.0			—
Business weeks	12.6			12.6			—


Airport-to-airport:
Tonnage
Total pounds ¹	458,773			437,977			4.7
Average weekly pounds ¹	36,411			34,760			4.7

Linehaul shipments
Total linehaul	649,152			623,211			4.2
Average weekly	51,520			49,461			4.2

Forward Air Complete shipments	104,143			85,917			21.2
As a percentage of linehaul shipments	16.0		%	13.8		%	15.9

Average linehaul shipment size	707			703			0.6

Revenue per pound ²
Linehaul yield	$	16.83		$	16.70		0.6
Fuel surcharge impact	1.67			1.28			2.0
Forward Air Complete impact	2.25			1.97			1.4
Total airport-to-airport yield	$	20.75		$	19.95		4.0


Logistics:
Miles
Owner operator ¹	8,472			7,179			18.0
Third party ¹	4,093			3,617			13.2
Total Miles	12,565			10,796			16.4

Revenue per mile	$	1.71		$	1.61		6.2

Cost per mile	$	1.28		$	1.25		2.4	%


¹ - In thousands
² - In cents per pound; percentage change is expressed as a percent of total yield.



Forward Air Corporation
Forward Air Inc. Operating Statistics

	Year ended
	December 31,			December 31,			Percent
	2011			2010			Change

Operating ratio	83.5		%	86.9		%	(3.9	)%

Business days	255.0			254.0			0.4
Business weeks	51.0			50.8			0.4


Airport-to-airport:
Tonnage
Total pounds ¹	1,735,409			1,655,075			4.9
Average weekly pounds ¹	34,028			32,580			4.4

Linehaul shipments
Total linehaul	2,419,350			2,308,468			4.8
Average weekly	47,438			45,442			4.4

Forward Air Complete shipments	374,116			314,203			19.1
As a percentage of linehaul shipments	15.5		%	13.6		%	14.0

Average linehaul shipment size	717			717			—

Revenue per pound ²
Linehaul yield	$	16.80		$	16.40		2.1
Fuel surcharge impact	1.80			1.21			3.0
Forward Air Complete impact	2.27			1.86			2.1
Total airport-to-airport yield	$	20.87		$	19.47		7.2


Logistics:
Miles
Owner operator ¹	30,885			27,086			14.0
Third party ¹	13,798			12,943			6.6
Total Miles	44,683			40,029			11.6

Revenue per mile	$	1.67		$	1.64		1.8

Cost per mile	$	1.26		$	1.25		0.8	%


¹ - In thousands
² - In cents per pound; percentage change is expressed as a percent of total yield.

Important Information

This press release contains “forward-looking statements,” as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are statements other than historical information or statements of current condition and relate to future events or our future financial performance. Some forward-looking statements may be identified by use of such terms as “believes,” “anticipates,” “intends,” “plans,” “estimates,” “projects” or “expects.” Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The following is a list of factors, among others, that could cause actual results to differ materially from those contemplated by the forward-looking statements: economic factors such as recessions, inflation, higher interest rates and downturns in customer business cycles, our inability to maintain our historical growth rate because of a decreased volume of freight moving through our network or decreased average revenue per pound of freight moving through our network, increasing competition and pricing pressure, surplus inventories, loss of a major customer, the creditworthiness of our customers and their ability to pay for services rendered, our ability to secure terminal facilities in desirable locations at reasonable rates, the inability of our information systems to handle an increased volume of freight moving through our network, changes in fuel prices, claims for property damage, personal injuries or workers' compensation, employment matters including rising health care costs, enforcement of and changes in governmental regulations, environmental and tax matters, the handling of hazardous materials, the availability and compensation of qualified independent owner-operators and freight handlers needed to serve our transportation needs and our inability to successfully integrate acquisitions. As a result of the foregoing, no assurance can be given as to future financial condition, cash flows or results of operations. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

-END-

CONTACT:

Forward Air Corporation

Rodney L. Bell, 423-636-7000

rbell@forwardair.com

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